The work in this group is focused on the major events in the development of central neurons. In any complex tissue, the identification of a multipotential, self-renewing cell holds a particular fascination. Fate mapping, tissue culture and transplantation are three methods that embryologists have used to analyze the properties of cells. Fate mapping of neuronal precursors in vivo suggests that there are multipotential precursors to both neurons and glia. However, this approach does not necessarily reveal the full proliferation and differentiation capability of the cells. In vitro and in vivo manipulations must be used to test the developmental potential of a cell. As a consequence the LMB has devoted a great deal of effort to the development of tissue culture and transplant techniques to acquire new data on the potential of neural cells. Work from this group clearly identifies multipotential cells in vitro and in vivo. Factors that control the differentiation of fetal stem cells to neurons and glia have been defined in vitro. The importance of extracellular control of cell fate in the brain is further emphasized by recent transplant experiments showing that local signals recruit uncommitted cells to regionally appropriate neuronal states. These results focus attention on how the information in external stimuli is translated into the number and types of differentiated cells in the brain. The multipotential nature of cells in the brain is not restricted to the early stages of development. Our data shows that there are multipotential cells in the adult brain and this raises the intriguing question of how these cells only give rise to certain classes of progeny in particular places at specific times. The main conclusion of our work is that the cells themselves retain a surprising degree of plasticity. It follows that signals impinging on stem cells play a key role in defining the number and types of cells in the central nervous system at all stages of the life cycle. Competition between neurons for target derived rewards is thought to be a central part of an activity dependent program that regulates synapse formation and neuronal death. In spite of the theoretical importance of activity dependent competition in models of nervous system, there are few studies in vitro or in vivo on the role of neurotrophic factors in the initial synaptic interactions between neuron and target. Cell cultures prepared from embryonic day-16 (E-16) rat hippocampus were used to study the role of neurotrophins on the formation of synaptic transmission. Neurons cultured for 2 weeks exhibited very low levels of functional synaptic connections. Treatment of the cultures with the neurotrophins, (BDNF or NT-3) did not change the total number of neurons, nor the expression of synaptic-vesicle proteins or glutamate receptors. Neurotrophin treatment produced a 7-fold increase in the number of functional synaptic connections and a marked down-regulation of cadherins. BDNF induced formation of both inhibitory and excitatory connections, whereas NT-3 induced, almost exclusively, formation of excitatory connections. These results support a major role for neurotrophins in the induction and regulation of functional synapses in the developing hippocampus. These data extend our knowledge of the effects of the neurotrophins on hippocampal neuronal differentiation by suggesting that these factors are key components of the mechanisms which activate synapses in the developing hippocampus. The involvement of cadherins and the differential effects on excitatory and inhibitory transmission has critical implications for the establishment of functional synapses and neuronal plasticity. Tissue culture experiments have played an important role in our understanding of the vertebrate nervous system. It is our belief that this work on the first steps in synapse formation between central neurons is an important contribution to this tradition. However, in vitro studies have their limits. In addition to grafting experiments (discussed above) our group addresses in vivo mechanisms with transgenic technology. Two transgenic experiments have been carried out that have to define signaling pathways influencing CNS stem cell differentiation and circuit formation. Transgenic mice have been used to map DNA sequences that are required to specifically target transcription to CNS stem cells. In turn, these sequences identify trans-acting factors that are required to dock transcription complexes in stem cells. There is a major shift in gene expression coincident with stem cell differentiation and this aspect of our transgenic work gives unique experimental access to the problem of transcriptional regulation in stem cells. Further analysis of the properties of the first synaptic circuits in the hippocampus was the objective of a second transgenic study. The NMDA receptor plays an important role in synaptic modification. At the earliest stage of synapse function a specific subunit (NR2D) is highly expressed and then abruptly down regulated. The function of the NR2D subunit was assessed by expression in mice under control of the Ca2+/calmodulin kinase subunit alpha (aCaMKII) promoter, a cis-acting element which supports transgene expression in mature forebrain neurons. Complexes of NRI-NR2D subunits form channels which have reduced affinity to glutamate, a weaker Mg2+ block, lower conductance and a markedly longer deactivation time as compared to NR1-NR2A or B receptors. Therefore, profound modulation of NMDA receptor function can be envisaged by inserting the NR2D subunit into the NMDA receptor complex in forebrain neurons where NR2A and 2B subunits are predominant.